Proposed regulation to limit rate increases during health crises gets pushback from staffing agencies and travel nurses who disagree with salary restrictions
Hospitals across the nation are seeking relief from skyrocketing costs due to increased demand for temporary workers—especially travel nurses. This has led organizations like the American Hospital Association (AHA) to step in and call for legislators to cap spiking salary rates. Many clinical laboratories report similar increases in salaries following the outbreak of SARS-CoV-2 for medical technologists (MTs), clinical laboratory scientists (CLSs), histologists, and other skilled positions. This increase in salaries of lab scientists was mirrored by an even greater increase in the cost of travel MTs.
According to analysis conducted by Becker’s Hospital Review of hiring data from Vivian Health, an online job placement website for healthcare professionals, “Average weekly travel nurse pay climbed from $1,896 in January 2020 to $3,782 in December 2021, a 99.47% increase.”
A prior study by Kaufman Hall and Associates, LLC., found rates for temporary workers almost 500% higher than pre-pandemic times. While numbers are trending downward, it’s clear that rates are still high enough to cause alarm, KFF Health News reported.
“During the pandemic there were staffing companies who were making a lot of promises and not necessarily delivering,” Dave Dillon (above), VP of Public and Media Relations at Missouri Hospital Association, told KFF Health News. “It created an opportunity for both profiteering and for bad actors to be able to play in that space.” (Photo copyright: L.G. Patterson/Missouri Hospital Association.)
AHA Alleges Price Gouging
Demand for temporary healthcare workers surged during the COVID-19 pandemic, and, because supply was limited, salaries for temporary workers—such as travel nurses—soared as well. This dramatic increase in hospitals’ costs prompted the AHA in 2021 to send a letter to the Federal Trade Commission seeking relief for healthcare providers from what the organization called “anticompetitive pricing by nurse-staffing agencies.”
In January 2022, about 200 House members urged then White House COVID-19 Response Team Coordinator Jeffrey Zients “to investigate reports that nurse staffing agencies are taking advantage of the COVID-19 pandemic to increase their profits at the expense of patients and the hospitals that treat them,” an AHA new release noted.
In an AHA House Statement titled, “Pandemic Profiteers: Legislation to Stop Corporate Price Gouging,” the AHA wrote “Our concerns range from potential collusion to increased prices way beyond competitive levels and/or egregious price gouging and the impact these behaviors could have on efforts to care for patients and communities.”
Temporary nurses make up a large portion of staff nationwide with 1,760,111 employed nationally as of September, according to Zippia research. With some nurses commandeering $40,000 signing bonuses and pay rates up to $10,000 a week for ICU nurses during the height of the COVID-19 pandemic, the significant impact of these rate hikes cannot be ignored.
“We have received reports that the nurse staffing agencies are vastly inflating price by two, three, or more times pre-pandemic rates, and then taking 40% or more of the amount being charged to the hospitals for themselves as profits. This situation is urgent and reliance on temporary workers caused normal staffing costs to balloon in all areas of the country,” Representatives Peter Welch, D-VT, and Morgan Griffith, R-VA, wrote in the letter submitted by the AHA to House members.
States Take a Stand
But nothing was done at the federal level to cap rates for travel nurses, so hospital organizations in 14 states lobbied legislators to cap rates at the local level. However, this has proven to be problematic.
At this time, at least 14 states have proposed legislation that impose limits on what temp nursing services can charge and what stipulations they must follow during a crisis. Navigating this patchwork of state laws could be challenging for both hospitals and temporary nurses.
Some states are taking sterner measures, KFF Health News reported:
Missouri regulators proposed legislation that would allow felony charges to be brought against healthcare staffing agencies that raise prices during emergencies.
Texas lawmakers proposed legislation that would administer civil penalties against agency price-gouging—laws which the state does not have on the books at all—and also would allow fees up to $10,000 to be assessed per violation of the proposed law.
New York proposed amendments to legislation that would cap the amount temporary staffing agencies could charge.
Nurses, Staffing Agencies Tell Their Side
The implementation of new laws to protect hospitals from alleged temp agency price gouging presents new challenges. One issue is state-to-state competition.
“It might become difficult to hire travel nurses, and some states could face a lower-quality hiring pool during a national crises if the neighboring state doesn’t have strict measures,” Hannah Neprash, PhD, Assistant Professor, Division of Health Policy and Management at the University of Minnesota, told KFF Health News.
And financial handcuffs may not sit well with staffing agencies that feel misunderstood by hospital organizations pushing for regulation. According to KFF Health News, “Typically about 75% of the price charged by a staffing agency to a healthcare facility goes to costs such as salary, payroll taxes, workers’ compensation programs, unemployment insurance, recruiting, training, certification, and credential verification, said Toby Malara, a Vice President at the American Staffing Association trade group.”
Malara added, “hospital executives have, ‘without understanding how a staffing firm works,’ wrongly assumed price gouging has been occurring. In fact, he said many of his trade group’s members reported decreased profits during the pandemic because of the high compensation nurses were able to command,” KFF Health News reported.
Not surprisingly, many nurses have also come out against government regulation of their wages.
“Imagine the government attempting to dictate how much a lawyer, electrician, or plumber would make in Missouri. This would never be allowed, yet this is exactly what’s happening right now to nurses,” Theresa Newbanks, FNP, a nurse practitioner who is affiliated with several hospitals in multiple states.
Creative Responses Required
Increases in both rates and legislation continue to spur creativity among hospitals needing to fill shifts, support staff, and prevent worker burnout.
The American Hospital Association December 2022 Task Force noted this in their “Creative Staffing Models” paper. The AHA cited telehealth visits, technical support, and working with non-traditional partners as beneficial ideas. These were also noted as meaningful ways to recruit and retain staff.
Other hospital systems have even created their own staffing agencies. Allegheny Health Network (AHN) developed a variety of systems where nurses can work a single weeklong assignment, multiple-week assignments, or transfer to other facilities, Kaiser Health News reported. While these staffing scenarios make up a small percentage of the hospital staff, it’s a worthwhile addition to increase options for nurses.
Staff turnover for RNs increased from 8.4% to 27.1% last year, as reported by the 2022 NSI National Healthcare Retention and RN Staffing Report. Finding solutions to staffing shortages—and consequently increased temporary nursing cost—is crucial because burnout is still a problem, just as it is in clinical laboratories and pathology groups.
Clinical labs should proactively investigate how a vendor will respond to a data security incident and how quickly, says expert
Clinical laboratory managers in New York and surrounding areas should be aware that almost one million protected health information (PHI) records from as many as 28 healthcare providers appear to have been stolen from a medical records company that services these providers.
Practice Resources LLC (PRL), a company that provides billing services for dozens of hospitals and medical providers in Central New York, announced in August they were the target of a ransomware attack that occurred on April 12 of this year. The Syracuse-based organization stated that hackers may have captured personally identifiable information (PII) such as names, home addresses, treatment dates, health plan numbers, and internal account numbers of 934,138 patients.
The data breach affected the patient records of dozens of medical providers and the clinical laboratories that service them, as well as physical therapists, pediatricians, gynecologists, orthopedic surgeons, and more.
“When a lab’s vendor has some type of breach, the lab entity that provided the compromised information could have some liability related to the breach,” explained Jim Giszczak, JD (above), McDonald Hopkins, in an interview with The Dark Report over a similar data breach in 2019. “That’s why every lab should be proactive and do a review to understand each vendor’s policies, procedures, training, and response in the event of a breach. Because your lab needs to know how a vendor will respond to a data security incident, and importantly, how quickly it will respond, it’s critical for lab officials to review the contracts they have with vendors that acquire, or have access to, PHI.” (Photo copyright: McDonald Hopkins.)
Not a Scam
“Unfortunately, it’s not a scam,” stated David Barletta, President and CEO of PRL, in an interview with local Syracuse news WSYR. “This really did happen in April—there was a ransomware attack on our system. We brought in forensic accountants and forensic information teams to come and look at what happened.”
PRL sent out more than 940,000 letters to potential victims of the cyberattack in August, noting that some patients may receive more than one letter.
The complete list of “healthcare entities on whose behalf Practice Resources LLC is providing notice of data incident,” according to PRL, includes:
Although their investigation did not uncover any evidence that personal data was misused, PRL has arranged credit monitoring services free of charge for one year from the date of enrollment. The company is also offering proactive fraud assistance to help people with any questions or in case they become a victim of fraud.
“There were no patient social security numbers that were taken. No medical record information was taken,” Barletta told WSYR. “We really, just out of an abundance of caution, felt that it was necessary that we provide them with credit monitoring for a year—just in case.”
Hundreds of Thousands of Patients Affected by Breach
When PRL discovered the data breach, the company took immediate steps to secure its systems and scrutinize the nature and extent of the incident. They then hired a forensic team to investigate what patient data may have been accessed by the hackers, a process that took several months.
“It does take a long time because each client has hundreds of thousands of patients maybe,” Barletta explained. “We have several large clients that really bore the brunt of this.”
According to Barletta, PRL bills about $450 million annually for its clients, which include some major institutions in Central New York. The New York state Attorney General’s office is investigating the hacking incident and delving into whether PRL’s data security was adequate.
As a result of the breach, FamilyCare Medical Group, which serves more than 80 physicians and thousands of patients, lost all of its laboratory data, according to the group’s CEO, Mitchell Brodey, MD. They had to close their lab for several months while their computer system was rebuilt. During this time, all their lab work was sent to another laboratory for analysis, MSN reported.
The PRL ransomware attack was what is commonly known as a third-party data breach. This type of breach occurs when sensitive data is stolen from a third-party vendor, or when their systems are used to access and steal sensitive information stored on other systems.
In the United States, the Federal Trade Commission (FTC) is responsible for enforcing federal privacy and data protection regulations. If a breach affects 500 or more individuals, the company must issue a press release and notify the FTC and all affected consumers within 60 days of the discovery of the breach.
Clinical Labs Should Proactively Review Member Agreements
In 2019, our sister publication The Dark Report covered a major data breach affecting more than 20 million patients. That breach occurred when hackers gained access to the data systems of a third-party bill collector and impacted four of the nation’s largest clinical laboratories:
At that time, The Dark Report asked James Giszczak, JD, Chair of the Litigation Department and Co-Chair of the Data Privacy and Cybersecurity Practice Group at McDonald Hopkins, to provide insight on what steps clinical laboratory leaders should take to avoid and handle data breaches.
“One important lesson from this data breach is how critical it is for clinical labs and pathology groups to be proactive in making sure they review their vendor agreements,” Giszczak stated. “In that review, labs need to know the specific measures each vendor is taking to protect the information the lab is providing to their vendors.”
Giszczak suggested that clinical laboratory leaders make sure they understand each vendor’s policies, procedures, training, and response in the event of a data breach. He reiterated that labs could have some liability related to the breach.
Legislation has been introduced that, if passed, would ensure health consumers have the opportunity to see and correct information held by data brokers
When it comes to patient privacy, pathologists and clinical laboratory managers may be spending more time addressing a growing issue with the patient data their labs create and store. Third-party data brokers want to position themselves to collect healthcare data at the source so can they de-identify it and sell it to interested parties.
Data brokers are commercial entities that collect, assemble, and/or maintain personal information about individuals. They also sell or provide third-party access to the information, explained the Congressional Research Service, a Legislative Branch Agency that provides policy and legal analysis to both House and Senate members and committees of the U.S. Congress, regardless of party affiliation.
Pharmaceutical companies, medical device manufacturers, and other businesses can purchase said data from various types of data brokers, such as information, analysis, and technology companies. The purchased data then can go on to guide industry investments or launch drug marketing campaigns. (more…)
Quest has not yet commented on the lawsuit, which was filed by three individuals who had clinical laboratory tests performed by the nation’s largest public lab company
In California last Thursday, three California residents filed a class action lawsuit charging Quest Diagnostics Incorporated (NYSE: DGX) with acquiring competitor medical labs, paying kickbacks to physicians, and developing exclusionary agreements with health insurers to monopolize the market for clinical laboratory testing in Northern California.
Filed in U.S. District Court for the Northern District of California, the complaint cites violations of the federal Sherman Act and the California Unfair Competition Law, Unfair Practices Act, and the Cartwright Act on behalf of California residents Christi Cruz of San Jose, Colleen Eastman of Hollister, and Carmen Mendez of, Milpitas. All three plaintiffs have used Quest laboratories and paid Quest Diagnostics Incorporated of Madison, New Jersey, for those testing services, the complaint says.
Lawsuit About Clinical Lab Testing Services Filed in Federal Court
The complaint was filed in the court’s San Francisco Division. In the court papers, lawyers for the three plaintiffs explain that injury to competition is manifest in three ways: above-competitive prices, inferior quality of testing, and reduction in choice among providers of routine diagnostic testing. “There is ample evidence that Quest has controlled prices in the relevant market in Northern California since at least 2011,” the complaint explains. (more…)
Survey results show pathologists and clinical lab managers why largest health insurers have market clout and can exclude local labs from their provider networks
Over the past two decades, ongoing mergers and acquisitions of health insurance organizations have led to ever-greater concentration of market share, even as the number of large health insurance companies has shrunk. One consequence of this trend is that many clinical laboratories and anatomic pathology groups have lost access to managed care patients.
The degree of market concentration will surprise most pathologists and medical laboratory professionals. The concentration of market ownership is clearly demonstrated by the fact that the 25 largest health insurers in the United States now control two-thirds of this $744-billion market. But the largest plans are not necessarily the best, according to 2013 consumer satisfaction surveys conducted by J.D. Power & Associates. (more…)
